Section 3: Views of National Economy, Major Economic Threats

The vast majority of Americans rate U.S. economic conditions as only fair (38%) or poor (53%) and most expect more of the same – or worse – over the course of the next year. Half (50%) expect the economy to be unchanged a year from now, while 18% expect things to get worse. Just 28% expect the economy to improve.

These grim expectations come even as fewer Americans say they are hearing mostly bad news about the economy. In a separate survey conducted Dec. 1-4, 36% said the economic news these days is mostly bad, down from 67% four months ago.

The public’s economic outlook has soured over the past two years. In June 2009 nearly half (48%) were optimistic about the economy, and as recently as April 2010, a 42% plurality expected economic conditions in the country to improve over the next year. That figure fell to 29% in June and August of this year and remains low, at 28% today.

Democrats are more optimistic than either Republicans or independents; 39% of Democrats think the economy will improve over the coming year compared with 21% and 23% of Republicans and independents, respectively. Yet Democratic expectations have declined sharply over the past few years. As recently as April 2010, 61% of Democrats thought the economy was on track to improve.

Threats to America’s Economic Well-Being

Asked to rate several possible threats to the country’s economic well being, 76% say the size of the national debt is a major threat, while smaller majorities cite economic competition from China (59%) and the power of financial institutions and banks (56%). Fewer than half say Europe’s economic problems (46%) and government regulation of business (44%) are major threats to the nation’s economic well-being.

Large majorities across partisan groups see the national debt as a major threat, but Republicans (88%) are more likely than Democrats (67%) to express this view; 77% of independents say the size of the national debt represents a major threat to U.S. well-being.

The partisan gap is even wider in views of whether government regulation of business is a major economic threat. More than six-in-ten Republicans (63%) say government regulation is a major threat; just 42% of independents and 33% of Democrats agree.

Most Democrats (62%) and independents (59%) say the power of financial institutions is a major threat to the nation’s economic well-being, compared with 45% of Republicans.

Europe’s economic problems are not widely seen as a danger to the U.S. economy. Only about half of Republicans and independents (49% each) say Europe’s problems represent a major threat to the economic well-being of the United States. Similarly, 43% of Democrats see the situation in Europe as a major threat.

Personal Finances: Not Great Now, But Expected to Improve

Americans’ assessments of their own finances have remained steady, if not especially positive. About four-in-ten call their personal financial situations excellent (6%) or good (32%), while more say they are in only fair (37%) or poor (24%) shape financially.

At the same time, most Americans remain optimistic about their financial futures: 58% expect their own financial situations to improve over the next year. This has varied little in recent years, and financial hope has a long history: Since the question was first asked almost 20 years ago, a majority always has said their own financial situations would improve over the next year.

Republicans are more likely to say their current economic situations are excellent or good (54%) than are independents (36%) or Democrats (32%). Democrats are slightly more likely than Republicans to expect their personal finances to improve over the next year (62% versus 54%); 60% of independents also express optimism about their finances.

About Pew Research Center Pew Research Center is a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping the world. It conducts public opinion polling, demographic research, media content analysis and other empirical social science research. Pew Research Center does not take policy positions. It is a subsidiary of The Pew Charitable Trusts.